We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk market. According to Mr. Michael Bodouroglou, Chairman and CEO of Paragon Shipping Inc., in an interview with Hellenic Shipping News Worldwide,
“we believe that 2011 should be a challenging year due to the amount of new vessels that are expected to hit the water during the year”. Providing with an explanation on the flurry of newbuilding orders this year, Mr. Bodouroglou said that current newbuilding prices are 12% below where the prompt resale values are, “so we do believe that the newbuilding market offers the best value in the drybulk sector” he said.
Paragon Shipping recently posted its third quarter and nine-month results. Which were the key performance figures you would highlight?
Despite the turbulence in the markets of the past two years, our chartering strategy enabled us report our 13th straight profitable quarter since we went public in 2007. This past quarter, there was a lot of activity, and we diversified into the containership market, and expanded our fleet without risking our balance sheet and maintaining our dividend. In addition, our adjusted EBITDA was $19.6 million in the third quarter, which was a $3 million improvement over the previous quarter, and our leverage remains at a moderate 57%.
What about your stock’s valuation? Do you think that there is enough room for an increase?
Absolutely, we feel our stock is undervalued. With our current charter coverage at 98% for 2011, our revenues are insulated from any market fluctuations that may occur next year and our stock price doesn’t properly reflect this. Our time charter coverage makes us feel our stock price should be higher.
Do you think that this volatility of the market will continue in 2011 or will things be more stable going forward?
We believe that 2011 should be a challenging year due to the amount of new vessels that are expected to hit the water during the year. Our outlook on the demand side is very positive, and we expect to see increased demand for iron ore and coal from the Asian markets during 2011.
However, the orderbook remains very large with 53% of the existing fleet on order, and even with most analysts’ predictions that continued slippage should be in the range of 30%-40% of the expected deliveries, we expect an oversupply of vessels in 2011, which should create a more volatile market next year.
Oversupply issues have plagued the dry bulk market this year. Are you more optimistic about 2011 or not, especially with regards to the Panamax segment where Paragon has an increased presence?
As I mentioned above, we remain concerned about the orderbook for 2011, and while the orderbook is the largest for Capesized vessels, at 60% of the current fleet, Panamaxes also have a large orderbook at 50% of the current fleet, so we expect to feel some pressure on rates in 2011. This is why we have been proactive in locking up 98% of our revenues for 2011, so that we are protected against a decline in freight rates next year.
This year we witnessed a strong rebound of newbuilding orders which are difficult to justify given the already huge orderbook. Are valuations really that low? What’s your opinion on the matter?
In today’s market, you can see that current newbuilding prices are 12% below where the prompt resale values are, so we do believe that the newbuilding market offers the best value in the drybulk sector.
That is also why you continue to see newbuildings being ordered despite the large orderbook. We ordered seven newbuildings earlier this year, to be delivered between October 2011 and December, 2012, so we have backed up our view with action.
New building cancellations and scrapping of older bulkers seem to be the best chance that shipping has to improve freight rates. How is each of these solutions progressing since the beginning of the year?
Cancellations are very hard to measure, because neither the yards nor the shipowners have an incentive to announce them. This year, it appears cancellations have stalled as the markets were much stronger than expected. There have also been many new orders, which may have been new owners taking over someone else’s order, but these types of deals may never become clear. We continue to see a high amount of slippage, which will push the current orderbook out further, and hopefully extend the orderbook far enough out into the future so that demand will have time to catch up with supply. In addition, vessel scrapings have decreased this year and unless rates are depressed for an extended period, there is no incentive to scrap older tonnage. We would need a market where rates remain depressed for six to nine months before scrapings would be significant enough to offset new deliveries. This is also more pronounced with the smaller tonnage, as over 50% of the handysize fleet is older than 20 years of age, compared to only 16% for the capesize fleet.
How would you characterize the current market for second hand vessels? Are asset values corresponding to current freight rates?
We believe asset values are artificially inflated at current levels, and it is shown by the fact that the price of a five-year old Panamax is 11% above its 10-year historical average, compared to the one-year T/C rate that is 8% below its 10-year historical average. To us, this signifies that second hand values are higher than they should be and that there is a disconnect in the current market between vessel values and freight rates.
Would you see investment opportunities in today’s market conditions?
We have struggled looking for investment opportunities in today’s markets, although we believe that in the drybulk sector, the Handysize vessels are the most attractive at the moment. As we mentioned, over 50% of the fleet is older than 20 years of age, and it also has the smallest orderbook at the moment with 33% of the current fleet on order. We feel Handysize vessels maintain stable earnings, even in declining markets and have the best supply/demand dynamic of the drybulk sector.
What about cargo demand in the future? Is a booming China enough on its own to sustain the global fleet growth?
While China continues to be the primary driver for the drybulk market, other Asian Countries, most notably, India, have also been growing at a significant pace, and it is no longer demand for Iron Ore alone that drives freight rates, it is also the increased demand for Coal. The combined demand for Coal imports from India and China has helped boost the markets in 2010, and we expect this to continue for the next several years. As these Countries continue to build up their infrastructure, there will be an increased demand for energy, which should continue to drive increases in coal imports into China and India. So while China alone may not be able to utilize new tonnage that is expected to enter the market in the coming years, the combination of China, India and the rest of the Asian markets should be able to absorb this tonnage over time. We don’t expect this to happen in 2011, although we expect the market to be stabilized by 2013.
Interviewed by : Nikos Roussanoglou, Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 21 October 10
WORLDS FIRST, SINGAPORE EXCHANGE TO CLEAR OTC INDONESIAN COAL SWAP - MONDOVISIONE
Mondovisione reported that, Singapore Exchange (SGX) will be the first exchange in the world to clear over-the-counter (OTC) Indonesian Sub-Bitumino ...
Thursday, 21 October 10
MEC WOOS INDIAN POWER FIRMS FOR 50% STAKE SALE - BUSINESS STANDARD
Business-Standard reported that, Singapore-based MEC Coal plans to rope in an Indian power company as a 50 per cent equity partner. It is believed t ...
Thursday, 21 October 10
CAPESIZE, A FANTASTIC WEEK WITH IMPROVED RATES IN BOTH BASINS - FEARNBULK
Handy Activity remains slow this week combined with a lack of fresh enquiry in the Atlantic. Indexes are all negative except Cape but it is worth no ...
Wednesday, 20 October 10
BLENDING OF IMPORTED COAL AT THERMAL PLANT UP TO 30 % MAY BE ALLOWED - PUNJAB NEWS LINE
Punjab News Line reported that, Indian government is considering allowing increase in the blending ratio of imported coal from 10 to 30 percent at t ...
Wednesday, 20 October 10
CANADIAN CHALLENGER ACQUIRES INDONESIAN COAL PROJECT
COALspot.com (Press Release): According to Challenger Deep Resources Corp's website and press release posted on the site, Challenger Deep Res ...
|
|
|
Showing 5556 to 5560 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Australian Coal Association
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
|
| |
| |
|
